Research Summary

Transparency, Organizational Learning, and Operational Control: Do Zones of Privacy Make Us More Productive?

by Ethan S. Bernstein

Description

Transparency, or accurate observability, of an organization’s low-level activities, routines, behaviors, output, and performance provides the foundation of both organizational learning and operational control. Yet, in a world obsessed with transparency, Professor Bernstein’s first significant finding was that boundaries to transparent observation may sometimes provide unanticipated benefits, and may in fact be an underutilized managerial performance lever. Using data from embedded participant-observers and a field experiment at the world’s second-largest mobile phone factory (located in China), he found that transparency on the factory floor systematically reduced workers’ performance by 10 to 15 percent as they concealed their activities through codes and other costly means. This finding indicates that creating zones of privacy may, under certain conditions, increase performance. 

In addition, in a curious phenomenon Professor Bernstein defines as the “transparency paradox,” he finds that watching your employees less closely at work might actually yield more transparency at your organization.